ACCO Brands Corporation (ACCO): history, ownership, mission, how it works & makes money

A Brief History of ACCO Brands Corporation

Company Overview

ACCO Brands Corporation, a leading global manufacturer of office products, has undergone significant transformations since its inception. Founded in 1903, the company has expanded its portfolio through both organic growth and strategic acquisitions.

Recent Financial Performance (2024)

As of September 30, 2024, ACCO reported net sales of $420.9 million for the third quarter, representing a decrease of $27.1 million, or 6.0%, compared to the same period in 2023. For the nine-month period ending September 30, 2024, net sales totaled $1.218 billion, down 9.4% from $1.344 billion in 2023.

Operational Challenges

The decline in sales can be attributed to lower back-to-school purchases and weakening global demand for office-related products. The Americas segment reported net sales of $259.1 million in Q3 2024, down 8.9% year-over-year, with an operating loss of $76.7 million for the nine-month period.

Cost Management Initiatives

In response to declining sales, ACCO implemented cost reduction measures, leading to a decrease in selling, general, and administrative expenses by 6.7% in Q3 2024. The gross profit margin improved slightly to 32.5%, up from 32.3% in the previous year.

Impairment Charges

ACCO recorded a significant non-cash impairment charge of $165.2 million related to goodwill and intangible assets, contributing to a net loss of $122.2 million for the first nine months of 2024, compared to a net income of $37.6 million in the prior year.

Liquidity and Capital Resources

As of September 30, 2024, ACCO had $102.0 million in cash and cash equivalents, with borrowings of $22.5 million under its $600 million revolving credit facility. The company's leverage ratio was approximately 3.50 to 1.00, below the maximum covenant of 4.00 to 1.00.

Stock Performance

ACCO's stock performance has been volatile, reflecting broader market trends and company-specific challenges. The company declared dividends of $0.075 per share, consistent with previous periods.

Future Outlook

Looking forward, ACCO Brands aims to enhance its product offerings in technology accessories and improve operational efficiencies to navigate the competitive landscape and drive future growth.

A Who Owns ACCO Brands Corporation (ACCO)

Ownership Structure

As of 2024, ACCO Brands Corporation (ACCO) is publicly traded on the New York Stock Exchange under the ticker symbol ACCO. The ownership of the company is divided among institutional investors, mutual funds, and individual shareholders.

Major Shareholders

The following table outlines the major shareholders of ACCO Brands Corporation as of 2024:

Top Institutional Investors

The following table lists the top institutional investors holding shares in ACCO Brands Corporation:

Recent Stock Performance

As of September 30, 2024, ACCO Brands Corporation reported a net income of $9.3 million for the third quarter, a decrease from $14.9 million in the previous year. The diluted earnings per share were $0.09 compared to $0.15 in the prior year.

The company also experienced a net loss of $122.2 million for the nine months ended September 30, 2024, compared to a net income of $37.6 million in the same period of 2023. The diluted loss per share was $1.27.

Stockholder Equity

As of September 30, 2024, the stockholders' equity for ACCO Brands Corporation was $615.5 million, with total liabilities amounting to $1,742.0 million.

Dividends

ACCO Brands Corporation declared dividends of $0.075 per share in 2024, amounting to a total of $7.2 million.

Debt and Financial Obligations

As of September 30, 2024, ACCO had total debt outstanding of $339.4 million under its senior secured credit facilities, with a weighted average interest rate of 6.72%. The company also had $575.0 million in senior unsecured notes due in 2029 at a fixed interest rate of 4.25%.

ACCO Brands Corporation (ACCO) Mission Statement

Overview of Mission Statement

As of 2024, the mission statement of ACCO Brands Corporation emphasizes its commitment to delivering innovative products that enhance productivity and creativity in educational and office environments. The company aims to be a leader in its industry by focusing on customer satisfaction, sustainability, and operational excellence.

Financial Performance

In the third quarter of 2024, ACCO Brands reported net sales of $420.9 million, a decrease of 6.0% compared to $448.0 million in the same period of 2023. For the nine months ended September 30, 2024, net sales decreased to $1,218.1 million from $1,344.2 million, marking a 9.4% decline.

Market Segments and Sales Trends

ACCO Brands operates through two main segments: ACCO Brands Americas and ACCO Brands International. For the three months ended September 30, 2024, the Americas segment reported net sales of $259.1 million, down 8.9% from $284.4 million in the previous year. The International segment experienced a smaller decline, with sales of $161.8 million, down 1.1% from $163.6 million.

Cost Structure and Profitability

For the nine months ended September 30, 2024, ACCO Brands faced significant challenges with a reported operating loss of $79.0 million, largely attributed to non-cash impairment charges of $165.2 million related to goodwill and an indefinite-lived trade name. The company's gross profit margin showed a slight improvement, reaching 32.5%, compared to 32.3% in Q3 2023.

Cash Flow and Liquidity

ACCO Brands reported operating cash flow of $95.5 million for the first nine months of 2024, a significant increase from $70.7 million in the prior year. As of September 30, 2024, the company had $102.0 million in cash on hand and $22.5 million in borrowings outstanding under its revolving credit facility, which has a total availability of $569.0 million.

Conclusion on Strategic Focus

ACCO Brands continues to focus on enhancing product offerings and operational efficiencies as part of its mission to drive customer satisfaction and maintain leadership in the office and educational products market. The ongoing challenges in global demand and restructuring efforts are being addressed through strategic initiatives aimed at cost reduction and market adaptation.

How ACCO Brands Corporation (ACCO) Works

Overview of Business Operations

ACCO Brands Corporation focuses on designing, manufacturing, and marketing a broad range of office products and accessories globally. Its product categories include office supplies, technology accessories, and consumer products.

Financial Performance

For the three months ended September 30, 2024, ACCO reported net sales of $420.9 million, a decrease of $27.1 million or 6.0% compared to the prior year. For the nine months ended September 30, 2024, net sales totaled $1.218.1 billion, down $126.1 million or 9.4% year-over-year.

Segment Performance

ACCO operates through two main segments: ACCO Brands Americas and ACCO Brands International. For the three months ended September 30, 2024, the performance of each segment is as follows:

Cost Management and Expenses

In response to declining sales, ACCO implemented cost reduction actions. For the three months ended September 30, 2024, selling, general and administrative expenses were $92.2 million, down $6.6 million or 6.7% from the previous year. The company continues to focus on improving efficiency and reducing costs.

Liquidity and Capital Resources

As of September 30, 2024, ACCO had cash and cash equivalents of $102.0 million and $22.5 million in borrowings outstanding under its revolving credit facility. The available borrowing capacity was $569.0 million, allowing for $8.5 million of letters of credit outstanding.

Debt and Financial Obligations

As of September 30, 2024, ACCO's debt consisted of $339.4 million under senior secured credit facilities with a weighted average interest rate of 6.72%. The company also has $575.0 million in senior unsecured notes due 2029 with a fixed interest rate of 4.25%.

Outlook

ACCO Brands Corporation's outlook remains cautious due to ongoing challenges in demand for its products and the economic environment. The company is focused on restructuring efforts and enhancing operational efficiencies to navigate these challenges.

How ACCO Brands Corporation (ACCO) Makes Money

Revenue Streams

ACCO Brands Corporation generates revenue primarily through the sale of a diverse range of office products and technology accessories. The company's offerings include stationery, storage solutions, and various office supplies. In 2024, net sales were reported at $420.9 million for the third quarter, reflecting a decrease of 6.0% year-over-year from $448.0 million. For the nine months ended September 30, 2024, net sales totaled $1.218 billion, down 9.4% from $1.344 billion in the previous year.

Cost Structure

ACCO's cost of products sold (COGS) for the third quarter of 2024 was $284.0 million, down 6.3% from $303.2 million in Q3 2023. For the nine-month period, COGS decreased to $818.2 million from $915.9 million in the prior year, marking a 10.7% reduction. This resulted in a gross profit of $136.9 million for Q3 2024, which is a decline of 5.5% from $144.8 million in Q3 2023. The gross profit margin improved slightly to 32.5% from 32.3% year-over-year.

Operating Income

Operating income for ACCO Brands in Q3 2024 was reported at $26.3 million, a decrease of 18.3% compared to $32.2 million in Q3 2023. For the nine months ending September 30, 2024, the company recorded an operating loss of $79.0 million, a substantial decline from a profit of $97.5 million in the same period of 2023, primarily due to non-cash impairment charges of $165.2 million.

Expenses

Selling, General and Administrative (SG&A) expenses for Q3 2024 were $92.2 million, down 6.7% from $98.8 million in Q3 2023. For the nine-month period, SG&A expenses totaled $274.4 million, a decline of 6.0% compared to $291.8 million in the previous year. This reduction is attributed to cost-cutting measures across various operational areas.

Net Income

For the third quarter ended September 30, 2024, ACCO Brands reported a net income of $9.3 million, compared to $14.9 million in the same quarter of 2023. For the nine months of 2024, the company reported a net loss of $122.2 million, a significant drop from a net income of $37.6 million in the prior year.

Debt and Liquidity

As of September 30, 2024, ACCO Brands had $339.4 million in outstanding debt with a weighted average interest rate of 6.72%. The company also had $102.0 million in cash on hand and $22.5 million in borrowings outstanding under its $600 million revolving credit facility, with $569.0 million available for future borrowings.

Article updated on 8 Nov 2024

Resources:

• ACCO Brands Corporation (ACCO) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ACCO Brands Corporation (ACCO)' financial performance, including balance sheets, income statements, and cash flow statements.
• SEC Filings – View ACCO Brands Corporation (ACCO)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.